There's a potential battle brewing in the tire industry over how tire dealers will be compensated when a tire manufacturer sells a set of tires online to a consumer and then sends that customer to an independent tire dealership to have them installed.
So far Bridgestone Americas, Goodyear and Michelin North America have launched online selling initiatives.
Of these, Goodyear and Michelin have chosen to ring up the online tire sale for themselves and compensate the installing dealer with an installation fee.
Bridgestone, on the other hand, is taking a different approach, allowing the installing dealer to get full credit for the online tire sale, not just the mandated commission, as well as the installation charges.
Another compensation tact under consideration by Michelin is the establishment of a bonus commission driven by how well consumers rate and review the service provider experience.
These various approaches to compensation for an online tire sale could end up being a differentiator among independent tire dealers.
What concerns tire dealers, of course, is how much money they can make on a tire sale.
When the profit and revenue from the online sale of tires is kept by the manufacturing company, and the tire dealer gets reimbursed only for the mounting and balancing, that eats into the dealer's potential profits from the sale of that tire.
To date, this has been little more than an annoyance for dealer/installers, as tire sales to consumers through tire maker websites is still relatively small, and not many tire manufacturers offer this purchase option.
But that number is likely to change as more tire makers realize they are losing out on potential sales and, as a result, add the option for consumers to buy their tires on the company's website, as well.
According to data cited by Bridgestone Americas Tire Operations, only about 9 percent of recent tire purchasers bought online.
Looking ahead, however, it found that another 56 percent of consumers said they may or definitely will buy tires online in the future.
Going forward, as more tire makers add the option of online tire sales to their end-use customers, the impact of losing the profits from the tire sale will become more acute for tire dealers.
That's when the variations in commission and payment programs could become a deal breaker between tire dealers and their suppliers.